The nine-and-a-half-year-old bull market of 2018 has run into some headwinds in the major equity indexes, but the United States has remained far better with positive gains in 2018 than the negative performance in many international and emerging markets. Investors recently have had to be much more nimble due to the selling pressure seen in October. Despite that pressure and the market volatility, investors need to consider that the major U.S. indexes just hit all-time highs in September. And investors have to evaluate how they want their assets positioned for the rest of 2018 and into 2019.
24/7 Wall St. reviews dozens of analyst upgrades, downgrades and initiations each day of the week. This ends up being hundreds of analyst calls by the end of each week. The goal is to find new investing and trading ideas for our readers. Some calls cover stocks to buy, and some cover stocks to sell or to avoid. When it comes to “buy” ratings, there are many different names and many different levels of risk and return to consider. Most stocks receiving new Buy or Outperform analyst ratings in Dow Jones industrial average stocks and S&P 500 stocks come with projected upside of 8% to 10% at this stage in the bull market. There is another type of Buy rating that is far more speculative, one in which the projected upside can be 50%, 100% or exponentially higher.
Investors must understand that speculative stocks generally are much riskier than Dow or S&P 500 stocks. They rarely come with dividends, and many of the companies have limited operating history. Revenues and earnings in the most speculative companies are either limited or may not be expected for years.
The most speculative classes of stocks often tend to fall within biotech and technology, but they can sometimes include energy, metals, minerals and other high-risk areas. Investors must never forget or ignore the notion that they may be risking their entire investment in highly speculative companies.
24/7 Wall St. has identified 10 highly speculative stocks that have been received Wall Street analyst calls in the past 10 days in which the analysts have projected upside of 50% to 300%. Again, these are highly speculative by nature, and they should be avoided by investors who are very conservative and are looking for stable earnings and dividends.
AcelRx Pharmaceuticals Inc. (NASDAQ: ACRX) was raised to Buy from Hold and was given an $8 price target at Jefferies on October 15. Its shares had closed previously at $3.98, after a 10.7% gain the day. Yet, the stock closed down 12.5% at $3.63 on Friday, so the new price would imply even that much more than 100% upside. AcelRx has a $220 million market cap and a 52-week trading range of $1.65 to $5.03. This call was after an FDA Advisory Committee recommended approval of Dsuvia, a non-invasive opioid, for the treatment of moderate to severe acute pain.
As a reminder, formal FDA decisions do not always follow panel recommendations. That said, the committee voted 10 to three in favor of recommending the approval of Dsuvia, and its Prescription Drug User Fee Act (PDUFA) date is November 3, 2018. AcelRx was among the speculative exponential upside stocks in mid-August as well.
Aimmune Therapeutics Inc. (NASDAQ: AIMT) was reiterated as Outperform at Wedbush, along with a $72 price target that was double and then some over the $28.28 prior closing price. The call from the morning of October 17 still had a lower price by Friday’s closing bell of $27.29. Aimmune initiated its Phase 2 AR101 and Dupilumab trial for peanut allergy, which is also as part of a collaboration with Regeneron and Sanofi. The Wedbush report noted that management is confident of an AR101 Biologics License Application (BLA) submission by the end of 2018 and anticipates a priority review with potential U.S. approval in the fourth quarter of 2019.
The company is also studying egg allergy as well, and Wedbush sees potential updated information on its follow-on trial and a BLA filing in the fourth quarter of 2018. Aimmune has nearly a $1.6 billion market cap and a 52-week trading range of $24.56 to $42.00.
Eiger Biopharmaceutical Inc. (NASDAQ: EIGR) shares were up about 8% at $11.75 on Wednesday morning (10/17) after releasing positive results from its Phase 2 study of Avexitide targeting GLP-1 in patients with post-bariatric hypoglycemia. Ladenburg Thalmann has been rather bullish here, and the firm raised its price target to $28 from $23 after the release.
Other firms are even more positive on Eiger, with a consensus target price that was about $30 and a street-high that somehow gets it up to a $53 price target. The 52-week range is $7.46 to $18.00, and the market cap is $170 million.